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The Doctor is In

Posted By The Practitioner, Tuesday, November 13, 2012
Updated: Tuesday, November 13, 2012

November 14, 2012

The Doctor is In

This week The Practitioner brings you an interview with an MD, MBA turned Family Business Advisor – and his insights into how some core elements in a medical education can provide models for advisors and consultants as they think about their work with families in business.

Mark Heitner has degrees in medicine and business, completed training as a psychiatrist, and has managed three software companies and two hospitals. He writes about business succession planning, the unmet needs of family business owners and heirs, and the fledgling attempts by financial institutions and advisors to reach out to families.

The Practitioner: You’re in the unique position of having both MD and MBA next to your name. How did that double degree come about?

Mark Heitner: I became the medical director of a hospital immediately after completing psychiatry training at Cornell. I was in a critical discussion about the future of the hospital when it was made clear to me that my opinions had been discounted because I was a physician. So I got a MBA at the University of New Mexico, where I was on the medical school faculty. In the course of treating families, I got to know their business issues and saw the overlap of family issues with family business issues.

The Practitioner: How is this career trajectory useful as you give advice to family business owners?

Mark Heitner: Psychiatry training involves three years of a hands-on, closely supervised curriculum in family dynamics and family psychotherapy. Psychiatrists run family meetings, also known as "family psychotherapy”, from the first week of training. This training is extraordinarily helpful in dealing with the dynamics of a family held business. Psychiatrists practically invented the term "dysfunctional family”.

The value of an MBA lies in being able to speak the language of business. Physician - MBAs may also have had hands-on operational experience, such as running hospitals, research facilities, charitable foundations or his or her own family business. Physician-MBAs may have fought with competitors, managed managers, filed lawsuits, and made payroll.

The Practitioner: Can you speak a little bit about the physician/family enterprise advisor connection?

Mark Heitner: The skill sets used by physicians transfer directly into family business consulting.

Problem-focused rapid assessment of an urgent matter is a cornerstone of medical training. It involves establishing a rapport with the patient and acquiring vital information from multiple sources.

Also, physicians are accustomed to making recommendations under trying circumstances—often without nearly as much information as they’d like. Further, physicians must have a comfort level with problems that are evolving, in order to manage what may be multiple complex challenges. Is advising family businesses any different?

The unspoken dynamic of family business is the threat of death or the consequences of illness of the wealth creator or heir. Families recognize that practicing physicians address this issue throughout the day and will address this issue in a family business head-on. As a result, the calls to a physician-MBA consultant are not for family mission statements but for emerging, urgent problems. For example, the ability to routinely inquire about illness – cancer, alcoholism, depression, and heart disease – means the physician can address the implications of these issues in a family and the family firm.

And then there is the matter of caring. By and large, physicians are thought of as caring people. As one sage observed, "the secret of caring for the patient is caring for the patient.”

The Practitioner: What advice would you give to other advisors serving family business clients?

Mark Heitner:

We live in a time of unparalleled wealth creation and the transfer of unthinkable wealth to the next generation. Families are desperate for advice about their children, their legacy, and how to pass the business, their wealth and their values to the next generation. . Unfortunately, a family’s usual advisors focus on narrow issues like gift taxes or asset allocation, and not goals. These advisors are silent on the issues of most concern to their clients, and perhaps, rightly so. The either have no expertise in family matters or are sidelined by the constraints by their profession. Family firm advisors are needed now as never before.

My advice is to serve as a non-family board member of the family firm. This brings in expertise families may not have in house. In any business, it’s helpful to have outside board members because these boards tend to be more active and more constructive. But for family businesses in particular, the interplay at home tends to affect the interplay at work and complicate things. An outside board member stands a better chance of facilitating change.

The Practitioner: Why is it important for different advisors to communicate with one another about their mutual clients?

Mark Heitner: It is stunning that a family’s advisors have so little communication with each other, and that they know so little about the family. This costs them and their client dearly, as evidenced by the rise in trust litigation. Investment advisors may be the worst "offenders.” When a wealth creator dies and passes his/her wealth onto the spouse, 50% of the surviving spouse changes the advisor. Almost all of the other heirs do when the spouse passes. Perhaps family business advisors can coax other advisors out from their silos, and create a team approach to a family. That’s why I published articles this year in Trust & Estates and Probate & Property, on the problems of heirs and in business succession planning.

Stay tuned next week as Karen Vinton summarizes and gives the practitioner's perspective on some of the latest research in our "Rising Star Journal",  Family Business Review.

Yours in Practice,

 The Practitioner 

About the Contributor

Mark Heitner, MD, MBA is ranked one of the top ten psychiatrists in California by His interests include working with family firms and business advisors, regarding succession planning, conflict resolution and business strategy. He is currently researching family advisory services offered by financial institutions. Mark can be reached at [email protected].

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